Frequently Asked Questions About Receiving Supplemental Payments for Lost Wages

The state, territory and the District of Columbia is responsible for refunding to FEMA any unobligated balances that FEMA paid that are not authorized to be retained per 2 C.F.R. § 200.343(d).

Additionally, states, territories and the District of Columbia are responsible for recovering assistance awards from individual claimants who obtained the assistance fraudulently, assistance awards made to individuals who were not eligible for unemployment, and assistance awards made in error (See 44 C.F.R. 206.120(f) (4 and 5); see also 2 C.F.R. § 200.343(a)-(b) for guidance on the grant closeout and liquidation period).

No, the Lost Wages Assistance program is separate and distinct from other unemployment compensation programs.

Yes, states, territories and the District of Columbia may use the costs incurred to administer underlying state-funded benefit payments made to eligible claimants in order to demonstrate that the 25% cost share for their federal LWA award has been met.  If a state or territory chooses to do so, they must be able to allocate which costs were incurred to administer the underlying benefit payments to (1) only those claimants who were eligible for LWA, and (2) only during the six week period for which FEMA provided funds.

Yes, states, territories and the District of Columbia may use the underlying state-funded benefit payments made to eligible claimants to demonstrate that the 25% cost share for their federal LWA award has been met.  At closeout, FEMA will ensure the 25% cost share has been met at the aggregate level, for both benefit payments and administrative costs.  (See [44 C.F.R. § 206.110(i)]).

The state, territory and the District of Columbia may count UI payments during the same period of federal funding consistent with the parameters of the grant – week of unemployment ending Aug. 1, 2020, onward, for individuals that meet the LWA requirements to be eligible. States, territories and the District of Columbia may not apply funds expended prior to the week of unemployment ending Aug. 1, 2020.

There are two supplemental payment options for the state, territory and the District of Columbia to demonstrate the cost share:

• Option 1: the individual receives $400 - $300 federal contribution (75% cost share) and $100 from state, territory and the District of Columbia funds, including Coronavirus Relief Funds (25% cost share).
• Option 2: the individual receives $300 - $300 is the federal contribution and to satisfy its cost share the state, territory and the District of Columbia will be credited for underlying regular unemployment insurance paid from state/territory funds for the population that receives the $300 supplemental payment.

States, territories and the District of Columbia are required to indicate their supplemental payment option selection ($400 or $300) on the Other Needs Assistance Administrative Option Selection form as part of their grant application package.

At grant close out, the state, territory and the District of Columbia will need to demonstrate how they met the statutory cost share. The state, territory and the District of Columbia will be responsible for demonstrating 25% of the total aggregate grant award. For the $300 option, states/territories can satisfy this cost share by showing that they expended state/territory funds equivalent to at least 25% of the total grant amount on regular unemployment payments to individuals who received lost wages supplemental payments, retroactive to August 1, 2020.

For administrative costs, FEMA will only provide the state, territory and the District of Columbia with the 75% federal contribution upon award. 

The timeframe to administer funding to individuals will vary by applicant. States, territories and the District of Columbia must adjust their unemployment insurance system to access these funds and accommodate program requirements, such as claimant eligibility, which may factor into delivery time state/territory systems and capabilities vary. The Department of Labor estimates an average of three weeks from Aug. 8, as states, territories and the District of Columbia adjust their systems concurrently with FEMA’s review process. However, at least one state has estimated it will have all payments out retroactive to Aug. 1, 2020, in less than one week from grant award.

Once a grant is approved, a state, territory and the District of Columbia will receive an initial obligation of three weeks of funding. Once a state, territory and the District of Columbia is prepared to implement the program, the state/territory will draw down the grant funds as frequently as weekly from the Treasury in accordance with payment procedures for their UI program and consistent with the requirements of the Cash Management Act. States, territories and the District of Columbia may make retroactive payments to eligible claimants for the weeks ending August 1 to August 22, 2020. After the initial three-week obligation, additional weekly disbursements will be made on a weekly basis in order to ensure that funding remains available. This is similar to the mechanism states/territories used to draw down Federal Pandemic Unemployment Compensation program funds.

However, states, territories and the District of Columbia should apply for grants as quickly as possible given the potential for program termination based on the parameters established.

The start date for both the Period of Assistance and the Period of Performance is July 25, 2020, which is the start of the week ending Aug.1, 2020. FEMA approved six full weeks of funding for Lost Wages Assistance from the week ending Aug. 1, 2020, through the week ending Sept. 5, 2020.

FEMA will coordinate with states, territories and the District of Columbia directly to complete missing items in their application packages, as necessary.